Non-Resident Indian (NRI) Information

We have a dedicated team of Associates for NRI customers as they have unique set of queries/questions when buying property. The team is trained on RBI laws as well as other legal aspects of NRIs buying property in India. They bring along substantial experience of consulting NRI customers on property purchase in India. We help you with a reliable, transparent and hassle free transaction and ensure that your money is safe and is in right hands.

DEFINATION OF NRI

An Indian citizen who stays abroad for service or carrying on business or career outside India or for any other intention in conditions representing an unclear time of stay overseas.

OR

A Government servant positioned out of the country on duty with the Indian missions and parallel other agencies set up abroad by the Government of India where the officials draw their salaries out of Government resources.

OR

Government servant appointed abroad on assignments with foreign Governments or regional/international agencies like the World Bank, International Monetary Fund (IMF), World Health Organization (WHO), Economic and Social Commission for Asia and the Pacific (ESCAP).

OR

Executives of the State Government and Public Sector Undertakings deputized abroad on provisional assignments or posted to their branches or offices abroad.

Who is known as a foreign citizen of Indian Origin?

Ans.:A foreign citizen is considered to be of Indian basis proviso:

He held an Indian Passport at any time

He or his father or paternal grandfather was a citizen of India by high caliber of the Constitution of India or the Citizenship Act, 1955.

Nevertheless, this does not affect to citizens of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Nepal.

BUYING

Q1 : What circumstances should a consumer consider while buying a housing flat?

Market Trends about the widespread rates of property in the surrounding area and the previous identified dealings.

Look for photocopies of the all actions of label linked to the property to be bought. Check up the conducts to set up the possession of the property by trader, if possible all the way through an advocate. Find out the survey number, village and registration district of the property, as these details are requisite for registration of the sale. Earlier encumbrances and loans, if any on the property must be apparent prior to close of purchase of the property. The label of the seller to the property must be apparent and money-making.

Make sure for standard arrangement plan and permitted building plan with number of floors.

Confirm the structure bye-laws in that area to bear out any concern with setback, side setback, height, etc.

Verify transfer fees, stamp duty and registration charges to be paid on purchase of the property as well as outgoings to be paid for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.

SELL

Sell

Q1 : Can a home/land be sold with no permission of Reserve Bank?

Ans.:Surely, Reserve Bank has arranged the general permission for sale of property. Though, where another foreign citizen of Indian origin buys the property, funds towards the purchase deliberation should either be submitted to India or paid out of balances in non-resident accounts kept with banks in India.

Q2 : Can sale proceeds of such property if and when sold be remitted out of India?

Ans.:In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a NRI or PIO, the sanctioned dealer may permit repatriation of the sale proceeds outside India, provided all the following conditions are satisfied:-

The immovable property was obtained by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999.

NRIs/PIOs is likely to achieve remittance of sale proceeds of immovable property in India irrespective of the period for which the property was gripped. The sale proceeds set aside to be repatriated should, however, not beat the foreign exchange taken in to acquire the said property.

In case of housing property, the repatriation of sale proceeds gets limited to not more than two such properties, if the property was purchased from funds held in NRE Account.

The amount hunted to be repatriated abroad should not beat the amount paid for acquisition of the immovable property in the foreign exchange entertained through normal banking channels or out of funds held in FCNR or NRE Account. In case of investment out of NRE Account, the amount to be considered as foreign currency falls equivalent value as on the date of payment for acquisition of the said property.

RENT OUT

Rent Out

Q1 : Can a home/land be sold without the permission of Reserve Bank?

Ans.:NRI/PIOs can with no limit lease their immovable property, whether purchase by application of forex or else, devoid of looking for any permission from the RBI. The leasing proceeds being a current account transaction is restorable outside India, simply if the appropriate tax is paid or provided for.

Acquisition of Immovable Property in India

Ans.: No, NRI's do not need any permission to acquire any immovable property in India other than agricultural / plantation property or a farmhouse.
Here, we pass on to the table below for an inclusive list of dealings probable. {PIO - Person of Indian Origin}

NRI

PIO

Resident

Note

Buy Property From

Yes

Yes

Yes

For NRI

Sell Property To

Yes

Yes

Yes

Receive Gift From

Yes

Yes

Yes

Give Gift To

Yes

Yes

Yes

Agricultural Property

Purchase Property From

No

No

No

Sell Property To

No

No

Yes

Receive Gift From

No

No

No

Give Gift To

No

No

Yes

Buy Property From

Yes

Yes

Yes

For PIO

Sell Property To

No

No

Yes

Receive Gift From

Yes

Yes

Yes

Give Gift To

Yes

Yes

Yes

Agricultural Property

Purchase Property From

No

No

No

Sell Property To

No

No

Yes

Receive Gift From

No

No

No

Give Gift To

No

No

Yes

Transfer of immovable property in India

Transfer of immovable property in India

Q1 : In what method the acquisition concern for the immovable property should be paid under the general permission?

Ans.: Exactly, the purchase consideration should be met up either out of inward transmittals in foreign exchange by usual banking mediums or out of funds from any non-resident accounts sustained with banks in India.

Q2 : Is there any perimeter on the number of residential properties that may be purchased by an NRI?

Ans.: Really, there comes no limit on the number of residential properties that may be bought by an NRI. Though, repatriation (the course of altering a foreign currency into the currency of one’s own country) is permissible only in high opinion of two such properties.

Q3 : What are the directing standard for acquiring hold of agricultural land / plantation property / farmhouse by NRI�s and foreign citizens of Indian origin?

Sale and Repatriation

Sale and Repatriation

Q1 : Can such property be put up for sale without the permission of Reserve Bank?

Ans.: Surely, Reserve Bank has approved general consent for sale of such property. Though, where a further foreign citizen of Indian origin buys the property, funds headed for the purchase concern should either be submitted to India or paid out of balances in non-resident accounts kept up with banks in India.

Q2 : Can sale go on of such property if and when sold to be remitted out of India?

Ans.: In the occasion of sale of immovable property other than agricultural land/farm house/plantation property in India by a NRI or PIO, the approved dealer may let repatriation of the sale proceeds outside India, if all the subsequent conditions are content:-

NRIs/PIOs can influence transmittal of sale proceeds of immovable property in India irrelevant of the period the property was held for. The sale takings permissible to be sent back should, nonetheless, not go above the foreign exchange carried in to obtain the said property.

In circumstances of residential property, the repatriation of sale proceeds is limited to not more than two such properties, if the property was bought from funds held in NRE Account.

The amount required to be repatriated abroad should not go beyond the amount paid for possession of the immovable property in the foreign exchange entertained through the usual banking mediums or out of funds held in FCNR or NRE Account. In case of investment out of NRE Account, the amount to be estimated as foreign currency is alike value as on the date of payment for gaining of the said property.

LOAN

Loan

Q1 : Does RBI have any strategy for loans to NRI's/PIO's?

Ans.: Yes, there comes strategy concerned by the Reserve Bank of India for allowance of Housing Loans to NRIs. The strategies are:

The loan amount should not be exceeded 85% of the cost of the housing unit.

Personal input as the cost of housing unit financed less than loan amount, can be convened from direct transmittals from abroad only by normal banking mediums, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.

Reimbursement of the loan, encompassing of the major and interest as well as all the charges are likely to be forwarded from abroad simply by normal banking mediums, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.

Q2 : Can approved dealer allow loans to NRIs to buy of a flat/house for residential purpose?

Ans.: Approved dealers have been allowed permission to grant loans to NRI's for attainment of house/flat for self-profession on their return to India issue to sure conditions Repayment of the loan should be come prepared inside a phase not more than 15 years out of inward remittance all over banking mediums or out of funds held in the investors' NRE/FCNR/NRO accounts.

Q3 : Can approved dealer allow housing loan to NRI's where he is a main borrower with his resident close relative as a co-applicant / guarantor or where the land is possessed mutually by such NRI borrower with his resident close relative?

Ans.:Surely, such residential loans provided in rupees can also be paid back by the close relatives in India of the borrower.

Q4 : What are the credentials I have to put forward along with the application?

Ans.: The subsequent credentials are usually to be put forward along with the application:

Photocopy of the labor contract and English translation appropriately supported by your employer.

Most recent salary certificate (in English) identifying the following: Name (as it appears in the passport), Date of joining, Passport Number, Designation, Perquisites and salary.

Photocopy of labor card/identity card.

Photocopy of applicable resident visa stamped on the passport.

Photocopy of monthly statement of local bank account for the last 4 months.

Property related documents.

Q5 : Can an NRI get loan against the security of immovable property in India? Are there any limits on the use of loan amount?

Ans.: An NRI can have a loan against the security of immovable property from Authorized Dealer subject to subsequent conditions:

The loan should be employed to suffice the individual necessities or for borrower's own business purposes.

Loan should not be used for prohibited activities, namely.

The loan amount cannot be submitted outside India.

Repayment of loan should be come out of remittances from overseas or by debit to NRE/FCNR/NRO account or out of the sale profits of shares or securities or immovable property against which such loan was settled.

Q6 : What sorts of incentive can NRIs, PIOs and foreigners stare forward in the Indian real estate industry that helps investment?

Ans.: Announced in March 2006, the relaxation of FDI in the building development sector lets NRIs, PIOs and all foreigners the same opening with their Indian counterparts in the Indian real estate sector.
The new strategies affirm that before to sell, the site has to be developed, built up or complete the criterion of minimum one year expansion.

NRIs, PIOs and foreigners can at present endow in land, purchase it, construct upon it or grow it, trade constructed buildings/developed plots.

FDI by automatic route can also course in not just for the housing sector, but also for townships, housing, commercial area, and infrastructure development.

Restrictions on minimum area of land, smallest figure of units have been removed.

Minimum constructed area necessary is 50, chosen area is 25 acres.

Q7 : Is there any precise target to in fact complete your construction development work?

Ans.: Fairly, the standards are laissez-faire. It lets you five years to end at least 50% of your project from the date to receiving all the consents. In usual situations, the project can be accomplished within three years. It assists to protect the customer really and continues fly-by-night people at bay.

Q8 : How does the habitual direction work?

Ans.: The habitual direction has made simpler much of the weighty investment procedure. Endorsement from the Reserve Bank is not necessary any longer. Yes, no need to set out to the Foreign Investment Promotion Board moreover. The lessening of paper work and entertainment of official procedure has set an increase to foreign investor assurance for endowing in India.

Q9 : What features should foreign investors view in the Indian property market to make easy the appropriateness of their projects?

Ans.: Any NRI prior to invest in the Indian realty should furthermore come on the exacting section that he sets up to endow in. Real Estate firms and consulting legal firms supplying specialized NRI services can be extremely helpful.

Q10 : What are the directions an NRI should pursue for receiving all the approvals in a unperturbed mode? Whom should one get in the procedure with?

Ans.: a large number comes depending on the section you desire to endow in. It assists to estimate the future’ state and to discern what the utilities are obtainable. An office market investment, for example, needs you to:

Get a hold with mentors for guidance on the city of alternative.

Delineate your intentions, the size of your investments.

Include a fairly accurate of the returns you are expectant to.

The yield that has grown from diverse factor ranges between of 8 - 8.5% to 12% for office space and 4% - 6% in residential.

Whether the land is for investment or for growth is also a determining issue, as is the local demand-supply circumstances.

While endowing in India, the accessibility and excellence of infrastructure or utilities like power, connectivity, security and long-term future plans necessitate to be evaluated.

Q11 : Is a single window clearance probable?

Ans.: Single window in a realty project in India occasionally may be intricate, owing to the concern of numerous establishments. If, it is a multi-storied structure, you require to find clearance from town planning authorities, clearance on design, elevators, fire fighting agencies, etc. Efforts are on to compose the procedure simpler and see-through, however.

Q12 : How is the sanctioning authority and monitoring authority diverse in India?

In some states, the Municipal authority is the decisive monitoring authority.

In smaller states and in non-urban areas, the town and country planning corporation proceeds as the monitoring authority.

In urban areas where most of the building happens, the municipal authority exercises power in giving the ultimate consent and sanctioning drawings and plans. Clearances on electricity, water supply and other utilities appear from here.

The new FDI norms state that the minimum investment has to be USD 5 million for 51% shareholding. Does this include funding of subsidiaries as well?

If you have a wholly owned subsidiary by a foreign company then the minimum capitalization norm is USD 10 million.

If you have a joint venture, the ratio 74:26 or 51:49 is immaterial. For a joint venture, the minimum capitalization is USD 5 million in foreign exchange.

This minimum amount of foreign exchange is required to arrive within six months from the date of commencement of business. The six months can be used to bring that money into India .

Q13 : Do the joint business enterprises label for enhanced potentials rather than inequitable competition?

Ans.: Really, the healthy contest is significant and essential. Though, in the case of FDI, joint venture certainly appears the wiser course to obtain as it has marvelous extent. The Indian partner would forever be in a better position to offer inputs in terms of information on land and clearances, where the foreign investors can plant their money, employ technology wisely and opportunities where both can harmonize to each other.

Q14 : Does that mean that the joint ventures come as the best investment option in Indian realty growth?

Ans.: Presently, as big foreign investors are venturing into India, their major interests have come in joint ventures. The first pair of dealings or strategies has gone this way and huge joint ventures have been hit. Trends explain that in the preliminary years, FDI inflow into realty in India will appear throughout joint ventures. Efforts to progress infrastructure and accelerate reform processes, better tax rules, computerization of land records and more precision have made sure improved investments and developments in the Indian realty industry.

Q15 : What two or three main belongings would propel expansion in the next 5 to 10 years?

Ans.: The reaction received post relaxation of FDI in the building and development sector has been extremely hopeful. This can be observed as a channel to investment as it would have a multiplier effect on the financial system. Other sectors that will accept an increase comprise:

Technology, allied infrastructure that will be put up.

Development of linked industries such as steel, cement, building material, designers, etc.

OTHER ISSUES

Ans.: Indeed, NRI/PIO can hire out the property with no appreciation of the Reserve Bank. Rent collected can be ascribed to NRO/NRE account or the remitted overseas. Powers have been handed over to the Authorized Dealers to permit repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do not uphold an NRO account in India based on the proper certification by a Chartered Accountant, endorsing that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid for.

Q2 : Can a person who had purchased the immovable property when he was a resident, maintain to hold such property even after becoming an NRI/PIO?

Ans.: Surely, he can maintain to hold the residential / commercial property / agricultural land/ plantation property / farm house in India without the approval of the Reserve Bank.

Q3 : In which account can the sale proceeds of such immovable property be endorsed?

Ans.: The sale proceeds may be endorsed to NRO account.

Q4 : Can the sale proceeds of the immovable property passed to in Q.No. 30 be remitted abroad?

Ans.: Indeed, provided the amount to be remitted does not go beyond USD one million per financial year, for all bona fide intentions to the satisfaction of Authorized Dealers and subject to tax compliance.

Q5 : Can foreign nationals of non-Indian origin resident in India or outside India who had before attained the immovable property under FERA with specific sanction of Reserve Bank maintain to hold the same? Can they transfer such property?

Ans.: Yes, they may keep up to hold the immovable property. Though, they can convey the property only with the before approval of Reserve Bank.

Q6 : Is a resident in India presided over by the provisions of Foreign Exchange Management (Acquisition and transfer of immovable property in India) Regulations, 2000?

Ans.: A person as a resident in India, who is a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan, is presided over by the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 i.e., he would require prior approval of Reserve Bank for acquisition and transfer of immovable property in India even though he is resident in India. Such requests are likely by Reserve Bank in consultation with the Government in India.

DEFINITIONS

Definitions

Q1 : Where are the terms a `person resident in India' and a `person resident outside India' defined ?

Ans.: Under FEMA, a person resident in India comes definite as a person living in India for more than one hundred and eighty-two days during the course of the preceding financial year (April-March) and who has emerged to or stays in India either for taking up employment, carrying on business or vocation in India or for any other purpose, that would point his intention to stay in India for an unsure period. In other words, to be treated as `a person resident in India' under FEMA, a person has not only to gratify the condition of the period of stay (being more than 182 days during the course of the preceding financial year) but has also to fulfill with the condition of the purpose/intention of stay.

Q3 : What is meant by a person resident outside India ?

Ans.: The Act means a 'a person resident outside India' as a person who is not a person resident in India' (As defined in Q.No. 36 above)

Q4 : Who can settle on whether a person is resident in India or not?

Ans.: The Reserve Bank does not settle on the residential status. Under FEMA, the residential status is determined by operation of law. The onus is on an individual to prove his / her residential status, if questioned by any authority.

Q5 : If a foreign national is a person resident in India as per the provisions of Section 2(v) (i)B of the FEMA, 1999, does he need approval of Reserve Bank to buy any immovable property in India ?

Ans.: A foreign national resident in India does not need approval from Reserve Bank from FEMA angle, but the approvals if any required in terms of regulations set down by other authorities such as the concerned State Government etc. will have to be taken by him / her. Though, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan needs specific prior approval of Reserve Bank.